Naked Capitalism Link of the Day

Today's link: Bigger Government is needed for the US economy, at One Salient Oversight:

What is obvious though is that the market is just not creating enough jobs. While the cause might be debatable, the result is not.

But what is needed to fix this is not just another round of stimulus packages. What is needed is a structural expansion of government spending. In essence, the US government needs to spend more.

Of course readers of this blog might wonder if I have changed my mind from recent times when I advocated austerity. The problem is that the word "austerity" has ended up becoming synonymous with spending cuts - which is the favoured position of conservatives. While I have advocated spending cuts in the area of military spending I came to the conclusion that the only way the US could ever hope to cut enough spending to make any difference would be to destroy Medicare or Social Security (and I don't use the word "destroy" lightly - you'd be looking at cuts of over 50% to make any difference). The alternative is to raise taxes - and that is the option I have always promoted. I still define this as "austerity" since it causes pain, but it is not the preferred description of the word in these times.

What I have done, though, is change my position on the market's ability to recover properly. I would've been happy for Obama to cut military spending and raise taxes in order to run a small deficit (at the least) but do little else while the economy stumbles, falls and eventually recovers from my austerity package. Now I realise that the economy wouldn't recover - at least not quick enough to make any difference.

His policy prescriptions are also very interesting.  Included are universal health care and promotion of renewable energy.  I think the water grid is a little out there.  Unfortunately, as he notes, there is zero chance of them being enacted.  He fears that the economy will tank, Obama and the Democrats will be swept out of office by lunatic Republicans, and the country will be led further down the path to ruin.  I hope that since the Republicans are the main cause of all of our economic woes, as well as so many incorrect beliefs among voters, more than half the country will vote against the Republicans.  I hope.